Executive Summary

Falling paper prices and competition from cheap imports caused the value of the UK stationery market to fall between 1996 and 1998, reaching £2.53bn in the latter year. Figures for 1999 and 2000 showed some improvement, with 0.6% growth in 1999 followed by 1% in 2000, bringing the market to £2.5bn. These values are at manufacturers' prices. In overall volume terms, the market has continued to show gradual growth.

The majority of the market is made up of products made principally from paper and board including envelopes, cut paper, continuous business forms, files and folders, etc. Key Note's market estimates include products for office, personal, school and student use, but exclude greetings cards and calendars. The remaining percentage of the market is made up of writing instruments, desktop items and other miscellaneous stationery items.

Stationery is a mature market, and there is an ever-present threat of a downturn as electronic trading and e-mail (electronic mail) take the place of paper communications - there is some sign that this may be starting to happen in the envelopes sector, for instance. So far, positive influences on the market have outweighed this negative trend in products such as cut paper and business forms. Positive influences on the market are the continued growth of direct mail advertising, the strong demand for bespoke products, growth in desktop printing in the office and home and increased emphasis on quality and colour in business reports and communications. There is also a strong demand from the school and student sector (with schools expecting more sophisticated presentation in their students' work and the popularity of products with youth and fashion appeal), as well as demand from the personal and business gift customer sectors.

In the distribution sector, the main change in 1999 and 2000 has been the appearance of numerous Internet shopping services for stationery and office products in general. The office products market is one of the more advanced in this respect these new services could soon have a large impact on the pattern of distribution.

For the future, general trends in the economy and education are favourable (prices have started to improve in some sectors since the middle of 2000). Key Note expects growth in the value of the market in the short term, with some increase in overall market volume. Some impact from electronic communications is expected to be felt within the next 5 years as the growth in direct mail diminishes. The future value of the market will also depend very much on paper prices, which tend to move in cycles, on the strength of the UK economy, and on the value of the euro or Britain's participation in the European currency scheme. In a market which is essentially mature, these economic influences have a dominant effect on the value of sales.

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